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Green steel The dream of "green" steel is a reality with US scientists unveiling a new method of extracting metallic iron from its ore while curbing carbon dioxide emissions.

The process uses electrolysis and, according to its developers, will eventually result in cheaper steel of higher purity.

Critically the only other by-product of the innovation, reported today in the journal Nature, is oxygen.

About 1.5 billion tonnes of iron is produced worldwide annually, contributing about five per cent of the human-induced greenhouse-gas emissions. Despite its best efforts, until now the steel-making industry has had little success in developing environmentally friendly processing.

Senior author Professor Donald Sadoway at the Massachusetts Institute of Technology says in a statement the idea for the new approach arose while working on a NASA project to look for ways of producing oxygen on the moon - a key step toward future lunar bases.

Sadoway found a process called molten oxide electrolysis (MOE) could use iron oxide from the lunar soil to make oxygen in abundance, with no special chemistry.

He tested the process using lunar-like soil from Meteor Crater in Arizona - which contains iron oxide from an asteroid impact thousands of years ago - finding it produced steel as a by-product.

Not viable

Sadoway's original method used an iridium anode, but since iridium is expensive and supplies are limited, it was not a viable approach for bulk steel production.

However the MIT team identified an inexpensive metal alloy of chromium and iron that can replace the iridium anode in molten oxide electrolysis.

Co-author Professor Antoine Allanore says another side benefit of the process is it will be cost-effective in smaller-scale factories.

Conventional steel plants are only economical if they can produce millions of tonnes of steel per year, whereas MOE could be viable for production of a few hundred thousand tonnes per year, he says.

In a commentary on the study also published in today's Nature, Professor Derek Fray, of the University of Cambridge, says the process could also be used for the extraction of other metals from their oxides.

He believes it will prompt "researchers to consider how to design a large pilot reactor", but concedes "considerable technical development will be required for the authors' discovery to be used commercially".

And in a nod to the technology's inspiration, Fray says the development could be invaluable for space exploration.

"If the process were carried out on the Moon," he writes "the gas could be used in the fuel-oxygen mixture that is needed for rockets and to sustain life, making human colonisation of the solar system more feasible."